 Special
SKI Report #18
Looking towards the "dark side"
Jeffrey M. Kern, Ph.D.
Email: jeff@skigoldstocks.com
USERX
| historicals
Written Sunday, Apr 1, 2007
Published Apr 2, 2007
Special SKI Report #18
Introduction (repeated from prior Reports):
I have been using my unique
SKI indices to predict price changes in the precious metals'
market for more than two decades. And my indices continue to
mark the critical points. I have initiated a subscription website
since 1/13/06 (yes, Friday the 13th) after having posted free
updates for years at the most informative gold site, 321gold,
since its inception approximately six years ago. SKI is a timing
service; although almost everyone seems to believe that market
timing is impossible, that IS what the SKI indices have done
for 32 years.
The SKI indices contain short-term
(16-20 trading days), intermediate-term (35-39 trading days),
and long-term (92-96 trading days) indices. A more comprehensive
description of these mathematical indices and their history is
found here.
Basically, the indices compare today's price to prices from a
specified prior time period. The name of the index specifies
the time period (e.g., 92-96 index = compare today's price to
prices from 96, 95, 94, 93, and 92 trading days earlier). Although
I use the oldest gold mutual fund, USERX, for analyses, the predictions
are applicable to the broad precious metals' market. I do not
recommend or analyze specific stocks, but my subscribers from
around the world regularly discuss individual issues on our Forum.
In addition to the truly unique SKI indices, I also use "run
patterns" to guesstimate turning points in the precious
metals' market. A "run" refers to a pattern of daily
up and down market closing prices. If the market has 3 consecutive
days of higher closing prices, the run is "3 up". If
prices then decline for 2 consecutive days, the run becomes "3
up and 2 down". If prices then close higher the next day,
the run changes to "2 down and 1 up". Some people have
referred to run patterns as "worms". A run pattern
is only completed after the direction of closing prices has changed.
I have compiled a listing of every run pattern that has ever
occurred and generated probabilities that the end of the run
marks a high or a low, moderated by the indices themselves.
New Material
Since the last 321gold Update
three weeks ago, the gold stocks
have basically gone nowhere. They've been linked to a larger-than-average
degree to the general stock market. But while the volatility
in the broad stock market has finally increased, the volatility
in the gold stocks has concomitantly decreased.
It's actually somewhat difficult
to write this Update. What new and exciting research or index
signal patterns can I describe when nothing has really changed
in the past three weeks? Things seem eerily quiet, with a general
lack of interest in our goldies. Don't sell a dull market short?
I might soon. Time marches by, wearing down everyone's patience
and I imagine, causing more people to revert to a position similar
to my own: cash. But at some point everyone has to pile in or
bale out to provide the power for a move through this 10.5 month
trading range since May 2006. With the SKI index signals that
are arriving now, that move can commence this week or next week
(after the 3-day U.S. holiday weekend; what a great prediction,
huh?; they may move this week or they may move next week; the
direction isn't specified; hint = SKI/Jeff are in cash; or they
may take a month to move!). I hope that I don't offend anyone
when I report that I use the word "crapola" with my
regular SKIers. Eventually we'll go up, but when? (that's the
classic line that guru/prognosticators/newsletter writers use!
smile).
I devote about two-thirds of
my net worth to precious metals' investments (not including my
home). My retirement funds can't participate because they are
with TIAA-CREF and they've "resisted" developing any
"narrow" investment vehicles such as a gold stock mutual
fund (despite my 8 years of once-a-year letters). It's either
cash, long gold stocks, or short gold stocks for most of my monies.
That's because I don't know how to "predict" anything
except gold stocks. And since I've been in cash for many months,
the broker isn't happy and the subscribers aren't happy, although
the subscribers gradually come around. I've sat through several
years of cash positions during the past 23 years and it's okay;
the risk is limited while I collect the 5% per year interest.
Then the last bottom occurs, I'm scared and buy the signal, and
I make 20-50% in 1-2 months. But who knows how long it'll be
before that opportunity comes?
In the way of research, education,
and analysis, I'll present the cyclical nature of the precious
metals' bull market since 2000. This is courtesy of one of my
subscribers. I'll brag and tell you that I believe that SKI attracts
the most avid students and learners. The website has a Forum
that I am proud of. They berate old Jeff endlessly when he makes
a poor call; they analyze individual stocks from Canada, Australia,
U.S., South Africa, and Europe; they day trade; they present
all different views and information in a civil manner (or else
Jeff has to "warn them")
Dave states, "I've been
keeping track of the significant highs and lows that have been
occurring with great cyclicity since the start of the bull market
in late 2000.
The months of May and November,
or a few days one side or the other, have almost always resulted
in an important reversal. Some "anniversaries" have
also shown significance.
In fact, the "recurring
cyclicity" of these dates prompted me to exit most of my
gold stuff on May 11/May 12 last year at the first sign of weakness
and also kept me from going long in Nov/Dec'06. So I sit here
with a good deal of expectation and some hope that the gold sector
is probably setting up to make a significant low again this May
or a few days prior or possibly a few days after (say the next
4-8 weeks)... Hopefully any technical signals will line up with
some major SKI signal(s). That would increase my level of confidence
considerably, and maybe even yours too?" We all need confidence
in order to risk our monies and I'm still rather chickenski...
Dave's data are as follows:
LOW November 16, 2000
HIGH MAY 18, 2001
LOW November 19, 2001
HIGH MAY 29, 2002
LOW April 29, 2003
HIGH December 2, 2003
LOW MAY 10, 2004
HIGH November 17, 2004
LOW MAY 16, 2005
HIGH MAY 11, 2006
LOW October 4, 2006
HIGH December 5, 2006
LOW MAY 2007 ????????
MAY has certainly been the
recurring month of trend reversals in the precious metals. I
really enjoy receiving and generating the data, particularly
when I'm in cash waiting for the "big buy" signal.
But such signals take time to set up. And we humans have limited
life spans. Markets require patience...
If you are interested in following
and learning more about the SKI indices, I'll write another Report
for 321gold in a few weeks or you can shell out the big bucks
for a SKI subscription. Weekly Updates are available by subscribing
for a month (or longer if you're wise and cheap enough to want
to save money) at my website www.skigoldstocks.com
for the princely sum of $25 (for a one month subscription) or
more ($200 for an annual subscription). I also provide more frequent
intra-week messages/alerts at a slightly higher price.
The precious metals are in
a very long-term (decade+) up-trend but are the most precarious,
volatile, and psychologically difficult market in the world (in
my opinion). That's the way it's always been.
Best wishes,
Jeff (STILL trying to maintain
patience and discipline; smile; but looking towards the short
side; the "dark side")
 SKI archives
email: jeff@skigoldstocks.com
Jeffrey M. Kern,Ph.D., is an academic psychologist with a specialty in the measurement and prediction of human behavior. The communications provided are for informational purposes only and are not intended to be investment advice or recommendations for specific investment decisions. Dr. Kern is not a registered investment advisor, but is registered as a commodity trading advisor (CTA). The information provided is considered accurate, but cannot be guaranteed. Investments/trading in narrow market segments or gold futures is for individuals willing to accept a higher level of risk for the opportunity of greater returns. Past performance is no guarantee of future performance. His website is www.skigoldstocks.com.
Communications should be sent to: jeff@skigoldstocks.com.
Copyright © 2002-2024 Jeffrey Kern. All Rights Reserved.
321gold Ltd
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